Effect on Competition

By John Pallatto  |  Posted 2004-07-09 Print this article Print

Oracle argued that DOJs definition of the markets parameters is too narrow because both the buyers and vendors are global enterprises. Even after the merger, there would be enough companies selling this software worldwide that it would be difficult for Oracle to control prices or arbitrarily raise them to the detriment of customers, Oracle argued.

Oracle also rebutted the governments argument that the merger would "chill innovation" in the market. It claimed that testimony showed that "Oracle has, and will continue to have, an incentive to engage in product innovation because it faces vigorous competition from much larger rivals" in the market.

Click here to read about claims by Oracle CEO Larry Ellison that PeopleSofts CEO blew earlier talks on a merger.

Oracle has also argued that the evolution of an "application integration layer" has "brought application suite vendors" such as Oracle, PeopleSoft, SAP and Microsoft into direct competition with middleware providers such as IBM and BEA Systems Inc. Middleware is part of the "technology stack" that software vendors have to support to be competitive, it said.

Oracle claimed that "competition among SAP, Oracle, IBM and Microsoft" to support the technology stack "will provide a continuing spur to innovation." Oracle claimed that PeopleSoft has no choice but to seek a merger with a company that can support the technology stack because it cant provide this technology itself.

Next Page: Did the government meet its burden?

John Pallatto John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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